U.K. Stocks Climb to 23-Month High After U.S. Jobs Data

Jan. 4 (Bloomberg) -- U.K. stocks advanced to the highest
level in 23 months after a report showed U.S. employers hired
more workers in December than economists estimated and the
jobless rate in the world’s largest economy remained unchanged.

BP Plc climbed 2.7 percent as Exane BNP Paribas said
Transocean Ltd.’s settlement of claims over the 2010 Gulf of
Mexico oil spill case was a positive development for the British
company. Fresnillo Plc declined 4 percent after UBS AG
downgraded the shares and silver slid to the lowest in four
months. Marks & Spencer Group Plc lost 3.1 percent after Nomura
Holdings Inc. lowered its estimate for fiscal-year profit.

The FTSE 100 Index rose 42.5 points, or 0.7 percent, to
6,089.84 in London, the highest since Feb. 8, 2011. The gauge
rallied 2.8 percent this week as U.S. lawmakers agreed on a
budget deal. The broader FTSE All-Share Index added 0.7 percent
and Ireland’s ISEQ Index gained 0.6 percent today, both jumping
to the highest in more than four years.

“The U.S. jobs report is good news for the markets as the
payrolls numbers were certainly better than expected,” said
Gerard Lane, a strategist at Shore Capital Group Ltd. in
Liverpool, England. “Overall, it suggests that the U.S. economy
is improving.”

American payrolls rose by 155,000 workers in December,
following a revised 161,000 gain a month earlier, the Labor
Department said in a report today. The median forecast of
economists in a Bloomberg survey projected an increase of
152,000. The unemployment rate held at 7.8 percent.

Policy Debate

Minutes released yesterday from the Federal Open Market
Committee’s Dec. 11-12 meeting revealed a debate between policy
makers on how long the bond buying should continue. Participants
were “approximately evenly divided” between those who said it
would be appropriate to end the purchases around mid-2013 and
those who said the program should continue beyond that date.

In the U.K., analyst estimates on earnings look “too
optimistic,” UBS AG strategists led by Matthew Gilman said.
U.K. companies will see a growth in earnings per share of 3
percent in 2013 and 7 percent in 2014, compared with average
estimates of 8 percent and 10 percent respectively, they wrote
in a note.

BP, whose Macondo well exploded in 2010 to set off the
largest offshore oil spill in U.S. history, advanced 2.7 percent
to 453.5 pence. Transocean’s settlement of federal claims
related to the spill, announced in a court filing yesterday,
could bring BP closer to one of its own before a civil trial in
late February, Exane analysts led by Alejandro Demichelis wrote
in a note.

Balfour Beatty

Punch Taverns Plc, the owner of more than 4,500 U.K. pubs,
climbed 11 percent to 11 pence, the highest price in nine
months, after Cerberus Capital Management LP bought peer Admiral
Taverns Ltd. from Lloyds Banking Group Ltd. The transaction was
valued at about 200 million pounds, according to three people
familiar with the matter.

Fresnillo slid 4 percent to 1,810 pence, the most since
June 22, as UBS AG cut its recommendation on the world’s biggest
primary silver producer to neutral from buy. The spot price of
the metal declined to the lowest level since Aug. 22.

Marks & Spencer lost 3.1 percent, the most since Nov. 7, to
376.4 pence after Nomura cut its estimate for the U.K.
retailer’s profit before taxes to 666 million pounds ($1.07
billion) from 694 million pounds. Same-store sales probably
dropped 1.4 percent in the third quarter, Nomura analyst Fraser
Ramzan wrote in a report.